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"Can capitalism get better with a conscience?" by: John Sample

Submitted by Baycity1 on Thu, 06/14/2018 - 8:09am

What a week for reading the newspaper or watching the news on your TV or phone.
We had a G7 meeting in Canada and a summit between the leaders of the United States and North Korea. All of this and the markets just yawned
If that wasn’t enough, it appears that the Federal Reserve will raise interest rates this week. Many are focused on speculation on how many more increases will come this year.
Never forget the impact of each increase on the cost of financing out debt. This is the real cloud hanging over this rather remarkable jump in the economy and the stock market.
One thing you can’t hide from is the constant crushing impact of interest compiling every day. While I see nothing but positives for the rest of 2018, there will be a reckoning with paying back what we owe.
On that note, I would harken back to James Carvel’s comment as he ran Bill Clinton’s campaign. He made the comment, “It’s the economy stupid.”
In that case, he was pointing to the fact that the economy had been bad under the Bush administration.
This same thought process repeated itself in the Obama campaign after the next Bush administration.
It is always easy to blame something and be the source for positive change.
I will be curious in the mid-term elections whether this scenario will be turned on its head as voters evaluate where we are. Will they vote their pocketbook, as it is the economy, stupid.
While I think that is a real possibility, there is the incredibly strong head wind of the distaste so many have for the current President to overcome.
Never forget that the Federal Reserve has yet to raise interest rates without causing a recession. The current administration’s theory is that economic growth will raise sufficient taxes to reduce the deficit.
It is a great theory but we have so far to go and the economic recovery is literally in the very late innings of the game. We need this to go on for a decade and hardly anyone believes that can happen.
So, what is an investor to do?
I watched with interest an interview on CNBC with Paul Tuder Jones.
He was touting a new ETF that will trade under the symbol of JUST.
Essentially this index will be composed of companies that embody the principles of conducting business while taking care of their employees and customers.
Jones identified 100 companies that have operated meeting very idealistic goals.
Over the last several years, these companies achieved higher growth levels than the Standard & Poor’s 500 stock-index.
It is Tudor’s belief that income equality will never be solved by the strong of the government but that thoughtful capitalism is the answer. Instead of just looking at achieving the highest level of profit, corporations should be focusing on their employees and the quality of the product. Maybe price isn’t everything. Even Wal-Mart seems to be heading in that direction.
The death of Virgin Airlines, Sir Richard Branson has stated repeatedly that if you treat your employees right, your customers will obtain great service.
Maybe capitalism can evolve into a concept with a conscience.